2004 (2) TMI 178 - AT - Central Excise

Summary

Issues: Allegations of failure to account for Man Made (Processed) Fabrics recovered, confiscation of unaccounted goods, redemption fine, duty payment, penalty imposition, challenge to Order-in-Appeal.

In this case, the Revenue appealed against the Order-in-Appeal passed by the Commissioner (Appeals) concerning allegations that the respondents failed to account for certain quantities of Man Made (Processed) Fabrics recovered from their premises. The adjudicating authority confiscated the unaccounted goods and allowed redemption on payment of a fine of Rs. 20,000. Additionally, the respondents were directed to pay appropriate duty upon clearance of the goods and a penalty of Rs. 5,000 was imposed. The Ld. Commissioner (Appeals) ruled that confiscation was not warranted but confirmed a penalty of Rs. 2,000 under Rule 226 for non-entry of production. The penalty on the proprietor was set aside as the goods were not deemed liable for confiscation. The Revenue challenged the correctness of the Order-in-Appeal.

During the hearing, the ld. DR represented the Revenue as the respondents were absent. The main ground for setting aside the confiscation order was the finding by the Commissioner (Appeals) that there was no evidence of clandestine removal or intention to evade duty. However, the Member (T) noted that failure to enter details in the RG-1 register could only be excused if there was supporting evidence of internal records maintained by the factory as per Rule 173G(5) and if the production was reflected in those records. In the absence of such evidence, the violation of Rule 173Q(1)(b) was established, obviating the need for further proof of clandestine removal or intent to evade duty. Consequently, the Member (T) held the Order-in-Appeal to be improper and set it aside, allowing the Revenue's appeal and nullifying the original order in relation to the present respondents.